You can watch Karl Griggs from CPC Finance discussing this property project with investors Sanjay Kumar and Malkit Purewal from Savoys Properties in our “Uxbridge Conversion” videos as part of our BRRR property journey series. You can follow the conversion journey from a rundown six-bedroom bungalow to seven bedrooms.
Sanjay Kumar and Malkit Purewal of Savoys Properties bought a detached bungalow with a two-bedroom outbuilding in Uxbridge for £650,000. When they bought it, it had a C3 Residential planning use class. It was already a 6-bedroom House of Multiple Occupancy (HMO) with an HMO license but in poor condition, with low quality sharing facilities.
The intention was to upgrade the HMO and ensure that each bedroom has an en-suite bathroom as well as kitchenette facilities (without a hob), something that is increasingly popular, partly due to the COVID-19 pandemic.
The investors bought the property using a short-term loan and with the valuation completed and a firm Gross Development Value (GDV) of £1,000,000, they already had term finance in place for a remortgage on completion of the works.
They anticipated that works would cost around £125,000 and expected that the improvements to the main house would produce income of around £55,000 for the house and around £15,000 for the outbuilding.
However, when the investors started work and stripped back the interior of the property, they discovered that the loft was in a bad condition and the investors realized that they would need to take off and replace the roof.
This extra necessary work led them to decide to undertake a loft conversion under permitted development rights and add another bedroom, which required planning permission, bringing the property to seven bedrooms. Apart from the roof, the property was structurally sound.
The investors anticipate that the extra bedroom should increase the property’s value to £1,150,000 and increase the total income of the properties to £87,000. They are aiming to complete the project within next 5 months.
Stay tuned for the rest of the Uxbridge Conversion project.